🏦 A Most Stable Implosion
As we covered last week, the implosion of the so-called "stable coin" Terra and its sister token, Luna, not only wiped out significant money for crypto investors over the last month but has intensified calls for regulating the cryptocurrency market both in the US and globally. Well, enter into that conversation South Korea. Prosecutors for the Seoul Southern District have begun investigating Terra coin's creator Do Kwon and his organization Terraform Labs for fraud and other violations of financial regulations.
The investigation has been reportedly reaching out to crypto exchanges “to share information on transactions linked to UST and Luna, including their trading volumes and the number of relevant investors,” reports The Block.
Terraform's in-house legal team resigned after Terra imploded, reports The Block.
“The design and issuance of Luna and Terra [was to] to attract investors, but the failure to properly inform them about the flaws, and the unlimited expansion of Luna’s issuance amounted to defrauding investors,” LKB & Partners, a firm hired to represent five investors bringing charges against Terra Labs, said, reports TechCrunch.
Kwon has been in a tweeting fury since Terra's collapse and is now proposing "forking" the currency to a new blockchain — effectively restarting the currency. “$UST peg failure is Terra’s DAO hack moment … a chance to rise up anew from the ashes,” Kwon tweeted. But calls for a "Terra 2.0" do not seem to be enticing investors.
Kwon can tweet all he wants about Terra's collapse and spin the narrative to his benefit as he awaits a likely trial. The one silver lining about all this, though, is that the prosecution and conviction of Kwon may create some legal precedent in the nascent field of Crypto law.